Between March 2001 and April 2012, the price of the price of gold never fell for 3 months in succession. “Two months max”made for a great slogan and signal to buy on pullbacks, most recently in January 2010, your last chance to do so below $1,100, and April 2009, which was your last chance to buy below $900. Divide by ten and we’re talking about the price of the GLD.

Until April 2012 that third down month just never came. Three consecutive months of falling gold prices are so rare that you can count the occurrences. Since 1957 in fact, they’ve struck only 65 times in a total of 661 three-month periods.

These three-month drops – let’s call them recessions to save me having to re-title these charts again – are rarer still in the U.S. stock market.

The S&P 500 index has delivered only 55 runs of 3-month drops over the same 55-year period.

As both charts show, three-month recessions are rarest of all in a runaway bull market. The S&P 500 put in none between 1991 and 1999, just as prices to buy gold put in none between 2001 and spring 2012.

So, is this three-month tumble the last straw for gold, finally snapping the camel’s back after the big hump of $1920 per ounce last summer? After all, the big top of January 1980, after which gold prices spent two decades in decline, took almost a year to deliver a three-month run of falling prices. Three losing months came thick and fast after that.

Three-month declines don’t necessarily signal a bear trend. The S&P 500 suffered such falls in each of July, August and September last year – making for five monthly falls on the trot, in fact, over spring/summer 2011.

The U.S. stock index still went on to recover and top that starting level, however, just as it went on to recover and blast through its previous highs after hitting a run of three-month recessions in 1990, not even midway through its long 18-year bull run.

Check also the sharp pullback in dollar gold-prices during 1975-76 on our chart above. Gold fell in seventeen of those 24 months, halving from top to bottom and recording 10 three-month recessions, more than during any other two-year period, including the early 1980s or the big brown bottom of the late 1990s.

Who was to know, amid that mid-1970s bloodbath that gold was on its way to rising sixfold again?>

"They - the vampire squids - have manipulated virtually every single price and valuation in the capital markets. People ought to recognize when they invest that one of the unspoken risks is the risk that this hall of mirrors, this Barnum and Bailey world that the Fed has created for us is going to vanish one day because they will not be able to hold it any more... It's not as if there is nothing to do in investing, but one must always keep in mind that the valuations that we see, that the prices that we watch flicker across the tape are prices that are fundamentally manipulated by these well-intended, dangerous people in Washington called the Federal Reserve". And to think that 3 short years ago Grant would have been branded a loony, tin-foil hat wearing gold bug, while now it has become trendy for hedge fund managers to bash the Fed with impunity. It is all downhill from here..."

“We have problems . . . The federal government is preparing for civil uprising,” he added, “so every time you hear about troop movements, every time you hear about movements of military equipment, the militarization of the police, the buying of the ammunition, all of this is . . . they (DHS) are preparing for a massive uprising.”

[iframe style="POSITION: absolute; TOP: 0px; LEFT: 0px" id=aswift_1 height=250 marginHeight=0 frameBorder=0 width=300 allowTransparency name=aswift_1 marginWidth=0 scrolling=no][/iframe]Hagmann goes on to say that his sources tell him the concerns of the DHS stem from a collapse of the U.S. dollar and the hyperinflation a collapse in the value of the world’s primary reserve currency implies to a nation of 311 million Americans, who, for the significant portion of the population, is armed.

Uprisings in Greece is, indeed, a problem, but an uprising of armed Americans becomes a matter of serious national security, a point addressed in a recent report by the Pentagon and highlighted as a vulnerability and threat to the U.S. during war-game exercises at the Department of Defense last year, according to one of the DoD’s war-game participants, Jim Rickards, author of Currency Wars: The Making of the Next Global Crisis.

Through his sources, Hagmann confirmed Rickards’ ongoing thesis of a fear of a U.S. dollar collapse at the hands of the Chinese (U.S. treasury bond holders of approximately $1 trillion) and, possibly, the Russians (threatening to launch a gold-backed ruble as an attractive alternative to the U.S. dollar) in retaliation for aggressive U.S. foreign policy initiatives against China’s and Russia’s strategic allies Iran and Syria.

“The one source that we have I’ve known since 1979,” Hagmann continued. “He started out as a patrol officer and currently he is now working for a federal agency under the umbrella of the Department of Homeland Security; he’s in a position to know what policies are being initiated, what policies are being planned at this point, and he’s telling us right now—look, what you’re seeing is just the tip of the iceberg. We are preparing, we, meaning the government, we are preparing for a massive civil war in this country.”

“There’s no hyperbole here,” he added, echoing Trends Research Institute’s Founder Gerald Celente’s forecast of last year. Celente expects a collapse of the U.S. dollar and riots in America some time this year.

Since Celente’s ‘Civil War’ prediction of last year, executive orders NDAA and National Defense Resources Preparedness were signed into law by President Obama, which are both politically damaging actions taken by a sitting president.

And most recently, requests made by the DHS for the procurement of 450 million rounds of hollow-point ammunition only fuels speculation of an upcoming tragic event expected on American soil.

These major events, as shocking to the American people as they are, have taken place during an election year.

Escalating preparatory activities by the executive branch and DHS throughout the last decade—from the Patriot Act, to countless executive orders drafted to suspend (or strip) American civil liberties “are just the beginning” of the nightmare to come, Hagmann said.

He added, “It’s going to get so much worse toward the election, and I’m not even sure we’re going to have an election in this country. It’s going to be that bad, and this, as well, is coming from my sources. But one source in particular said, ‘look, you don’t understand how bad it is.’ This stuff is real; these people, the Department of Homeland Security (DHS), they are ready to fight the American people.”

TruNews‘ Wiles asked Hagmann: who does the DHS expect to fight, in particular? Another North versus South, the Yankees against the Confederates? Hagmann stated the situation is far worse than a struggle between any two factions within the U.S.; it’s an anticipated nationwide emergency event centered on the nation’s currency.

“What they [DHS] are expecting, and again, this is according to my sources, what they’re expecting is the un-sustainability of the American dollar,” Hagmann said. “And we know for a fact that we can no longer service our debt. There’s going to be a period of hyperinflation . . . the dollar will be worthless . . . The economic collapse will be so severe, people won’t be ready for this.”

Dominique de Kevelioc de Bailleul: Speaking with the Wall Street Journal on Friday, commodities trader Jim Rogers of Rogers Holdings said riots such as the ones witnessed in Greece and reported as widespread in China will hit the United States and again in Europe as the next leg down in the financial crisis takes shape (after the election, he speculates in previous interviews).

“I’m more worried about those kind of problems [rioting] in the U.S. and Europe; this is where social unrest is going to be worse,” Rogers told the Journal. “I would suspect that, when economic conditions get worse here and get worse in Europe, we’re going to see . . . you’ve seen governments fail in Europe; you’ve seen countries fail in Europe. I suspect you’re going to see more of it [rioting], yes.

“We saw it in London; we’ve seen it in several countries in Europe in the last year or two. Yes, I expect to see it here, too. If you don’t, look out your window”

When asked about Bernanke’s credibility regarding his latest FOMC public statement, in which he said the Fed will be able to contain inflation, Rogers became noticeably irritated.

“Mr. Bernanke has zero credibility as far as I’m concerned. The Federal Reserve has zero credibility,” Rogers said forcefully. “Simon, go back at everything Mr. Bernanke has said in the last seven or eight years he’s been in Washington. He’s never been right about anything. The man has zero credibility for anyone who would take the time to look at his history.”

As far as further inflation down the road, Rogers stated inflation is already in the pipeline, and will manifest in higher commodities and consumer prices—of which, historically, have lagged money supply expansion by six months to one year.

As of the week ending Apr. 25, 2012, the Fed reported its balance sheet reached a total of $2.92 trillion, up from $2.71 trillion a year ago, and up from $920 billion in March 2008—well before the brunt of the financialcrisis took its toll on markets later in 2008 and early 2009.

A tripling of the Fed’s balance sheet within fours years won’t be the extent of the damage to the Fed’s debt monetizing scheme and the value of the U.S. dollar, according to Rogers, who sees much more Fed money printing to come as well as consumer price inflation as a result.

“Absolutely, they’ve been printing staggering amounts of money; they’ve been taking staggering amounts of debt onto their balance sheet, much of it is garbage,” said Rogers. “The federal government is spending huge amounts of money they have. We have inflation in the U.S., and it’s going to get worse, Simon.”

Rogers said investors have it easier today than prior to the crisis. It’s a heads-you-win, tails-you-win scenario. The emergence of Asia as a source of consumption of raw materials and finished goods will exact pressure on harder-to-find natural resources. If demand is crippled by the financial crisis, however, central banks will respond by debasing their respective currencies, forcing smart money into ‘things’ as a means of protecting wealth.

“In times of inflation . . . that’s put it this way, if the economy gets better there will be shortages of those raw materials and I’m going to make money,” Rogers explained. “If the economy doesn’t get better Simon, they’re going to print a lot more money. Mr. Bernanke doesn’t know anything else but to print money. And throughout history when governments debase the currency, you protect yourself by owning real assets, whether it’s silver or rice, or whatever it happens to be.” [Emphasis added]

Rogers’ take on the most popular asset class among investors who follow the American expat who now lives in Singapore—gold—is that, he holds the precious metal (and by extension, silver) as a reliable means of storing value during a globally coordinated money-printing policies executed among the world’s major central banks. He also discusses the virtues of owning oil as a play on ‘Peak Oil’ in addition to currency debasements.

“I own both [gold and oil] of them,” Rogers said. “Gold has been up 11 years in a row which is extremely unusual for any asset. It’s consolidating; it wouldn’t surprise me if it continued to consolidate. If it goes down a lot more, I hope I buy a lot more. I’m not selling my gold by any stretch of the imagination.”

Rogers added about oil, “The surprise with oil is going to be how high it stays and how high it goes. Simon, the International Energy Agency (IEA) has done a study. The world’s known reserves of oil are in steady decline. We have to find a lot of oil or the price of oil is going to unheard of heights.”

If we get another MF Global folks the market will drop 5,000 DOW points and not bounce, as that will be that -- in the grains, in the commodities, in everything.

And Ann Barnhardt has pointed out that the firm that used to clear Think Or Swim futures (but since the Ameritrade acquisition no longer does), Penson, might be that domino.

I have no idea what their liquidity position actually looks like. All I know is what I see in their stock price. But this does not look good, and as Ann points out there is now history with MF Global and the CME refusing to make good when their oversight fails and customer funds "disappear."

In short don't expect that you're safe if Penson blows because there is no evidence you will be safe, and plenty of evidence that once again CME will step back and refuse to accept any responsibility for anything that happens to your money.

What's worse is that Penson's net capital has deteriorated markedly in recent months. We don't have March's numbers but February was down nearly 30% over January. Two months have passed since that time.....

Now it's certainly possible that Penson could go under but customer funds would be protected and fine. That's ok if that happens -- businesses fail all the time.

But as I said at the time MF Global went down and customer funds were lost, if it happens againthere will be no confidence remaining in the market, the break will be immediate and disastrous, and it is entirely possible that the proprietary trading of all brokerages will unwind and you will discover that there is no such thing as a safe brokerage in which to trade or invest as it is entirely possible that we will discover that all such banks and brokerages have enough proprietary exposure that they will all fail and you will lose all your money.

That simply must be the assumption you make until and unless it's proved otherwise at this point in time.

Therefore if you are not, right now, playing only with money you can afford to lose 100% of, even if you're right about what the market is going to do, then you're a fool to be in the market at all.

Period.

And yes, this means you if you have a 401k, an IRA, or a pension whether private or public.

Our government has not and will not protect you. That has been proved over the last five years and all of the major political parties -- including Democrat, Republican and Libertarian have refuse to stand up and demand that the crooks go to prison. In fact, they not only have refused to say that or do it they're actively borrowing from the people they should be policing!

In 2008 and 2009 we had the opportunity to fix this as I was pounding the table on before the dislocation really took off -- back to 2007. I called for the reinstatement of Glass-Steagall, nightly liquidity proof and no more games. Of course that wasn't "politically correct" and would have exposed that all these firms were bankrupt already, so it wasn't done. Then the dislocation came and you get rammed.

Now it's about to come at us again, exactly as I expected it would, as we have fixed nothing in the intervening four years.

Don't say I didn't warn you if and when it happens because I most-certainly did.